740.00119 Control (Germany)/8–1248: Telegram

The Ambassador in the Soviet Union ( Smith ) to the Secretary of State

top secret
urgent
niact

1609. We met Molotov and Smirnov at 5 today in what was, at the beginning, a rather cooler atmosphere than before.1 We began by stating that we had now received instructions from our respective governments and that Soviet proposals in their present form were unacceptable.

In previous conferences each of us had directed particular attention to paragraphs 3 and 4 of the Soviet draft, stating they raised issues which our Govts regarded as of fundamental importance. These would be referred to later. I then proceeded make agreed comments on Soviet draft on behalf three representatives paragraph by paragraph, as contained in my immediately following telegram.2

Molotov’s reply was very cursory in regard to the first two paragraphs. He suggested words “in conformity with what is set forth below” as substitution for last phrase of paragraph 1, and remarked that satisfactory alternative wording could probably be found which would more specifically define restrictions which were to be removed, in lieu of the wording to which we objected in paragraph 1 and 2. He then reverted to paragraph 4. Today, however, he did not as on previous occasions reject our position in Berlin nor did he insist that quadripartite control had lapsed nor maintain any demand for the Soviet wording of this paragraph. His conversation seemed to me to be generally exploratory, in order to determine whether or not we had reached our definite and final bargaining position. As the talks continued he grew progressively more reasonable and more mellow (if such a word can be appropriately applied to Molotov). We continued to press strongly the point that our entire discussions really hinged on one basic factor—our right to be in Berlin and to continue quadripartite regulation and control of the flow and use of the new currency when introduced. Molotov never directly challenged any of our statements in this connection. He also readily admitted that certain practical questions would have to be settled in Berlin. The point to which he reverted most frequently and on which he seemed to concentrate today was the specific mention of a date on which the currency change would be made and the restrictions lifted. Discussion of this subject [Page 1036] became involved and protracted and finally, to bring matters to a bead, we suggested the possibility that a tentative date be accepted toward which planning would begin immediately in Berlin by the four military commanders, pointing out that until the machinery for the control and use of the Soviet mark was established any date was meaningless. This subject also Molotov did not directly challenge or reject; although he criticized it as vague. It was our opinion that at the last he wilfully misunderstood it.

Molotov then discussed occupation costs briefly, taking the attitude that he could not see any reason in our objection to the Soviet formula or to exempting Berlin from cost of occupation since all Four Powers were treated alike. An interesting feature of this phase of the discussion was that again he failed to challenge our juridical right, stating that Soviet proposals in this matter did not affect juridical rights of either side to be in Berlin, and that the problem was purely a practical one. We took note of this, and our reply to his comments are as indicated in the statement under Paragraph 4 at the end of my immediately following telegram. Our final statement was that the solution of question of occupation costs was dependent on solution of basic question which remained to be dealt with in first part of that paragraph. This brought us back to the question of currency, and after lengthy discussion Molotov suggested as an alternate solution that the Soviet Government might be willing to agree to the issue of the same quantity of Soviet zone marks for the Western sectors of Berlin as have been issued or introduced in Berlin by Western Powers, arguing that this would dispose of the technical question. We rejected this on the ground that it did not cover our basic requirement which was quadripartite control of currency in Berlin, and did not provide enough currency for our present and future operations.

After this Molotov again came back to question of a fixed date for the introduction of Soviet currency in Berlin and the lifting of traffic restrictions, and proposed that we draw up a list of questions relating to the flow of currency to be discussed by the representatives of the Soviet Union and Western Powers in Berlin. We replied that we would be perfectly willing to accept a tentative date and in fact proposed such discussion, but that the Commanders in Berlin must be provided with terms of reference which covered the basic points on which we insisted, and the technical points which we felt must be settled with regard to new currency. There was still outstanding the major question of Four Power control in Berlin and until this was decided, nothing could be done. We said it would be worse to fix a date and fail to meet it than to leave things as they are now.

We then asked Molotov if he could meet us on the question of Four Power regulation of currency. He evaded direct reply to this by reverting [Page 1037] to the second part of Paragraph 3 (London Agreements) although not aggressively. We repeated our Governments’ past objection to the Soviet wording on the lines of Paragraph 3 in the following telegram. He then suggested substituting for the second part of Paragraph 3 our oral statement of August 6.3 We reiterated that our instructions were specific and our Governments could not agree to any statements of this nature being inserted in a communiqué representing preliminary agreement. However, I said I was willing to ask my Government if the oral exchange between Generalissimo Stalin and ourselves might be confirmed confidentially by written notes, providing agreement was reached on all other points.

Roberts then suggested that insertion of this material would unbalance the document, pointing out that Articles I and II were to our mutual advantage, and insofar as the Soviet Government might think I benefitted us more than II benefitted them, this was more than balanced by Paragraph 4. Paragaph 3 would, we hoped, be to our mutual advantage. Molotov agreed, and at this point for a few minutes I thought that he was going to accept and conclude the conference. However, he recovered himself and rediscussed some of the parts of Paragraph 4, during which occasion was taken to point out that he would have to meet us on the basic point of principle under 4 if we were even to consider his proposal under 3, emphasizing again that unless our basic requirement for Four Power control and regulation of currency in Berlin were accepted, the rest of the document would automatically fall.

Molotov terminated the conversation shortly afterward by saying that he would report our statements to his Government, who would consider them carefully. We said we would report his comments and proposals and would inform him when we were ready for further discussions.

We are now in the position of each considering the other’s proposals. We expected a worse session. I was suprised when Molotov, confronted with what amounted to practically a complete and rather forcible rejection of almost the entire Soviet draft, reacted rather mildly. As said before, there seemed to be one time when he was almost ready to accept. He was handed a rather bitter pill and, if he did not swallow it, at least he did not spit it out. Our guess is that he will report to the Politburo tonight the fact that quadripartite control of currency and the economy of Berlin is essential if any agreement is to be reached, and will get the final decision as to whether or not this can be accepted in some form or other. We are undecided now as to whether we should have another go with Molotov or ask to see Stalin as the final [Page 1038] act, and would be most grateful for your advice. My personal feeling is that if there is ever going to be an agreement, probably our best chance is with Stalin at our next meeting.4

Smith
  1. This meeting was attended by Smith (U.S.), Roberts and Lunghi (U.K.), Chataigneau and Boyer de Fonscolombe (France), and Molotov, Smirnov, Pavlov, and Yerofeyev (U.S.S.R.).
  2. Telegram 1610, not printed. For the text of Ambassador Smith’s statement, see The Berlin Crisis, pp. 26–80 or Cmd. 7584, pp. 27–80.
  3. Presumably the reference here is to Roberts’ oral statement of August 6; for text, see Cmd. 7534, p. 25.
  4. In telegram 942, August 13, to Moscow, not printed, the Department of State opined that there was a good chance that Molotov would accept the Western draft communiqué virtually in toto if the Western position remained completely firm. The Department preferred that Ambassador Smith make one further approach to Molotov which could either result in agreement or could be used to make a request to see Stalin again (740.00119 Control (Germany)/8–1348). In his telegram 4187, August 13, from Paris, not printed, Ambassador Caffery reported that the French Foreign Ministry held similar views (740.00119 Control (Germany)/8–1348). In telegram 3688, August 14, from London, not printed, Ambassador Douglas reported that Bevin thought it would be wise to meet with Molotov again before meeting with Stalin (740.00119 Control (Germany)/8–1448).